Microgrids: Ushering in a New Era of Electricity Generation?

"I am not here to debate what isn’t debatable,” said Secretary of Energy Ernie Moniz back in August 2013 at Columbia University’s Center for Global Energy Policy in New York City. Setting the tone at the policy address, Sec. Moniz made no bones about where climate change and sustainability lie on the Administration’s agenda moving forward.

After graciously entertaining heckling from an impassioned anti-fracking audience member, Sec. Moniz was equally passionate about the “all of the above” agenda of President Obama’s new energy plan, first introduced back in June of last year. Atop the list of priorities, Sec. Moniz reiterated the importance of renewables, outlining a list of activities to incorporate solar and wind into the country’s future energy portfolio. One such project discussed was a recent microgrid deal signed with Chris Christie, the Republican governor of New Jersey.

The partnership between the DOE and the State of New Jersey will begin with a $1 million grant to the State to commence a 6-month feasibility study on a large-scale micro grid project, the first of its kind the United States, known as the NJ TRANSITGRID. The TRANSITGRID would island from the state grid to power trains during power outages like the ones caused by Hurricane Sandy back in October of 2012.

For Gov. Christie and Sec. Moniz, grid resilience is key in the integration of microgrid technology. Given the increase in natural disasters, as well as critical concerns of cyber security, especially in a global business center like the New York City area, microgrids have the potential to revolutionize the way we think of electricity distribution, and the reliability of renewable energy.

Resilience

Integrating new technology into old infrastructure is expensive and cumbersome. Distributed power through microgrids circumvents many of the direct integration challenges. The most basic appeal of microgrids is the diversification of power afforded to a community by having isolated power grids. The automated control systems of microgrids allows for ease of connection and disconnection from the main grid, coupled with the ability to integrate energy storage technologies. Self-contained generation means less strain on the national grids, especially in instances of unexpected peak demand surges during summer heat waves or, in the case of the American Northeast, the ability to supply consistent power in the face of natural disasters.

Because microgrids rely on their own sources of energy, trending microgrid power sources tend to be renewables, as costs are consistently dropping and efficiency is increasing. Additionally, microgrids allow for the efficient harvesting of renewable energy resources through automation and smart technologies, thus creating a way to manage the seemingly unmanageable Mother Nature. With greater availability of information to better assess and address the issues of forecasting, maintenance, and ultimately reliability, microgrids offer an innovative solution to the most pressing grid-related issues, with renewable generation being a clear perk. This is the “smart” in smart grid, and here, knowledge really is power (pun absolutely intended).

With growing clamor, both consumer and governmental, for increased use of clean energy and resiliency, microgrids offer a potential means of achieving state-by-state goals of renewable portfolio standards. Lofty goals like 100% by 2050 in New York, 30% by 2030 in California, and 40% by 2030 in Hawaii, are resulting in the implementation of more and more microgrid pilot projects. The US already has the largest microgrid capacity in the world, with no signs of letting up, totaling 1,459 MW of installed microgrid capacity and another 1,122 MW in planning phases. American investment also includes large investments for military use of microgrids by the Department of Defense.

Going Rural

Beyond urban and military resilience, microgrids have great potential on the other end of the spectrum as well. Currently, 1.3 billion people across the globe lack access to modern energy. In localities with little or no grid connectivity, but ample sunshine, distributed generation is nothing short of a godsend for communities reliant on dirty diesel and/or electricity theft. As central grid expansion is often not an option, distributed generation through microgrids offer a stable and reliable source of energy to places where the alternative is lights out.

According to a report by Navigant Research, “remote systems” account for 691MW of microgrid deployment with generation capacity of remote microgrids expected to rise to 1.1 GW by 2017. Microgrids prove to be more cost effective than individual household rooftop panels, and less cumbersome to implement than central grid extension. Further, current rural electrification microgrid projects are also leveraging existing telecom technology, allowing for pre-payments through SMS networks for communities to pay as they go, using resources already in place.

The International Renewable Energy Agency (IRENA) suggests that almost 60% of new generation needed to achieve universal electrification by 2030 is estimated to come from off-grid installations, with these rural microgrid options receiving the greatest bang for their buck with renewable energy sources. For rural off-grid options, renewable sources have lower O&M costs compared to conventional power streams, and offer a more secure electricity alterative, because fuel delivery and long distance transmission become a non-issue. Moreover, microgrid technology is already available in the market, and ready to scale in rural areas.

Microgrids stands out as the frontrunner in the drive towards universal electrification, assuming the obvious challenges of the financing gaps and weak policy frameworks are addressed.

"All of the Above"

In both densely packed urban centers and remote rural areas, microgrids represent an important investment, and one in which renewables could play a major role. Both sides of the spectrum equally benefit from the demand analysis and automation functions of microgrids. Allowing for more efficient and individualized modeling for required capacity, these distributed generation solutions directly address the needs for urban resiliency and rural electrification.

When comparing the costs of natural disaster recovery, and economic losses due to energy poverty, it becomes apparent that investing in ways to incorporate renewable energy into electricity generation and distribution through microgrid options becomes the cheaper and more efficient long-term option.

Back at Columbia, Sec. Moniz’s “all of the above approach” emphasized the importance of reliability, efficiency, security of supply, and suitability when planning for America’s future energy needs. Microgrids fit the bill, at home and abroad.

Tanya is a CSR professional based in California. Just before heading back to the States, Tanya spent a year iiving in Dubai, working as a consultant and market researcher in the solar sector. Her research interests include Renewable Energy, Sustainability, and International Public/Private Partnerships. Tanya's TEC research focuses on integration of renewables into the grid around the world ...

Tanya, very interesting first TEC post. Agreed, microgrids can be cost effective technologies for providing power in Developing Countries that lack existing centralized power grids or off-the-grid applications in Developed Countries. Microgrids can reliably provide electric power to individual residences or small communities by using some combination of solar power generation and power storage. So, how do most off-the-grid power consumers typically access power when variable solar and available power storage capacity-supply fails to meet high priority consumer demand/needs? Backup power generation. Unfortunately current-needed backup power supply overwhelming relies on power grids (if available) or small power generators. In Developing Countries these generators typically are fueled by petroleum (diesel or gasoline) and in Developed Countries (such as the U.S.) most often have backup generators fueled by cleaner fuels such as natural gas, or LPG in some cases. The use of older, more polluting portable diesel generators in Developing Countries have unfortunately led to major health issues in many communities.

To minimize the need for backup fossil fuel power generators needed to provide 24-hour reliable power supply for microgrids requires increased power storage. Currently the only technology available are very expensive batteries, which required installing very large excess solar power generation capacity for daily charging needs. Hopefully near future power storage technology innovations will substantially reduce the costs of needed backup power to displace fossil fuel(ed) generators.

The reality is that batteries are expensive and toxic. Enthusiasts love to write about how great they are for developing countries, but what about the waste? (in the US, we recycle about 90% of our lead-acid automobile batteries, the remaining 10% could be a lot of nasty chemicals going into our landfills).

Micro-grids that can be islanded like the NJ transit system (and many buildings that have UPSs and backup generators) are a great way to provide reliable power from an unreliable grid for special applications. But the roadmap for rural electrification should include grid extensions to get all communities on the national grids. Big grids can provide electricity with lower pollution and lower cost than microgrids with their small generators and lax emissions controls; bigger plants can be farther from population centers and use taller smoke-stacks to keep exhaust away from people. Big grids also allow the most efficient fossil fuel technology to be used, and allow most generators to operate at their most efficient power level (or be turned-off).

When variable renewables are linked across long distances via big grids, the combined variability is reduced, so less energy storage, fossil backup, and reserve generation capacity are required. Big grids also allow the use of nuclear power, which has the lowest environmental footprint of any energy technology.

Yes Nathan, the economics, reliability and minimum environmental impacts is why all Developed Countries have centralized their power grids historically, today and likely in the foreseeable future. I have assumed that smaller, microgrids will only be cost competitive or feasible for primarily off-the-grid applications where centralized power grids are unavailable such as in most Developing Countries and the more remote rural areas of Developed Countries. Economies-of-scale (cost per KWhr, fuel efficiency, environmental controls, etc.) will not likely change any time soon. The only exception is for emergency backup applications at hospitals and other critical services that must operate under nearly all situations or conditions.